A spokesman in Asmara said it would push for the "liberation of Somalia" through military and diplomatic means.

In Mogadishu, Kulow said the interim government welcomed the formation of independent political parties.

"But we will never accept a terrorist alliance that wants to use violence to gain any progress," he said.

The formation of the alliance is yet another bone of contention between long-time foes Ethiopia and Eritrea, and is likely to push back any prospect of desperately needed reconciliation in Somali politics, analysts say.

With 191 members of a central committee, the alliance includes well-known figures like Islamic courts leader Sheikh Sharif Ahmed and Hussein Aideed, a former deputy prime minister.

Analysts said the only possible upside from the alliance would be to provide a unified movement to negotiate with, should the international community be able to broker talks.

Leader surfaces

Sheikh Hassan Dahir Aweys, another senior leader of the Islamic courts, who happens to be on UN and US lists of terrorism suspects, showed up at the Eritrea meeting after being in hiding for most of 2006.

"I am a Somali nationalist fighting for a free and united Somalia, and this is considered by the US administration as terrorism"

Sheikh Hassan Dahir Aweys, Islamic courts spokesman

But it was not clear what position, if any, he would take in the alliance.

In an interview with Eritrean state media published on Wednesday, Aweys criticised Washington.

"I am a Somali nationalist fighting for a free and united Somalia, and this is considered by the US administration as terrorism," he said.

Meanwhile, in Somalia's capital Mogadishu, the government announced on Thursday that a dusk-to-dawn curfew that had been in place for three months, has been lifted for the holy month of Ramadan.

The curfew has been in place since June, intended to help stop fighting between opposition fighters and the transitional government.